The Principle of Finance That "Lower Returns Are Expected for Taking

question 25

True/False

The principle of finance that "lower returns are expected for taking on less risk" implies that rational investors would choose a risky investment only if they feel the expected return is high enough to justify the greater risk.

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Definitions:

Public Policy

Principles and standards considered to be in the public interest, which guide lawmakers and regulators.

Negligence Liability

Legal responsibility that arises from failing to act with the level of care that someone of ordinary prudence would have exercised under the same circumstances.

Regulatory

Pertaining to rules or directives made and maintained by an authority to regulate activities, often within specific industries.

Character and Skill

Attributes that define an individual’s moral qualities and abilities in performing tasks or professions.